Insolation Energy Limited

Technology — Solar · NSE

₹73.97+₹0.79 (+1.08%)

DalalBaazaar Score

68 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by moderate debt load, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:55 pm

Understanding the Business

Company site ↗

The 60-second version of Insolation Energy Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Insolation Energy Limited engages in the manufacture and sale of solar panels and modules under INA brand name in India.

IndustrySolar

SectorTechnology

Employees721

Annual revenue₹2,126 Cr

How does it make money?

Turns over ₹2,126 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 721 employees supports ₹2.95 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.95 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 19.1% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE32.0%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +665% while net margin moved +146% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+665%

Margin effect+146%

DalalBaazaar Score

68/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.40 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

71/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

79/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

8.1x

Sector Median

16.5x

median of 4 sector peers

🟢Against its sector it trades 51% below the peer median of 16.5x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

16.5x median of 4 peers · -51%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.0x

PEG

0.05

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 6.9% to 14.3% over 3 years.
Return on equity is rising
ROE has improved from 20.2% to 24.9%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 1207% over 3 years, from ₹68 Cr to ₹888 Cr.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 892% against revenue up 665% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹521 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.1% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 6.9% to 14.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 51% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 892% against revenue up 665%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 73% a year✓ 97.0% CAGR
Latest reported year was 104.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 12%✓ 14.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹521 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 16%✓ 19.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 11 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 4 neutral · 2 weak

Market Cap

₹1,631 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.1x

Cheap

Cheap against the generic band

P/B Ratio

2.03x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹9.1

Profitable

Profitable on a per-share basis

ROE

24.9%

Strong

Strong capital efficiency

ROCE

19.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.10x

Moderate

Moderate leverage

Revenue Growth (YoY)

104.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-11.7%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹521 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

7.5%

Average

Average margins

Net Margin

7.7%

Average

Average bottom-line conversion

Current Ratio

1.86

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.40

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

84.3 / 90.7

Bearish alignment (short < long)

RSI (14)

6.0

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹278 Cr	₹735 Cr	₹1,331 Cr	₹2,126 Cr	+97.0%
EBITDA	₹19 Cr	₹83 Cr	₹171 Cr	₹304 Cr	+151.1%
EBITDA Margin	6.9%	11.3%	12.9%	14.3%	—
PAT (Net Profit)	₹11 Cr	₹55 Cr	₹126 Cr	₹201 Cr	+165.8%
EPS	₹0.6	₹2.66	₹5.94	—	—
ROE	20.2%	51.3%	20.6%	24.9%	—
ROCE	18.9%	54.7%	25.0%	19.1%	—
Total Debt	₹68 Cr	₹107 Cr	₹120 Cr	₹888 Cr	+135.6%
Free Cash Flow	-₹30 Cr	₹13 Cr	-₹65 Cr	-₹521 Cr	—

🟢 Revenue has grown at 97.0% a year over 3 years.

🟢 EBITDA has grown at 151.1% a year over 3 years.

🟢 EBITDA Margin has risen from 6.9% to 14.3% over 3 years (+7.4 pts).

🟢 PAT (Net Profit) has grown at 165.8% a year over 3 years.

🟢 ROE has risen from 20.2% to 24.9% over 3 years (+4.7 pts).

🟡 ROCE has held roughly flat at 19.1% over 3 years.

🔴 Total Debt has grown at 135.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,155 Cr

Total Liabilities

₹1,347 Cr

Cash & Equivalents

₹88 Cr

Operating Cash Flow

-₹73 Cr

Capex

-₹448 Cr

Shareholding (proxy)

Institutional Holding

0.6%

Insider Holding

67.6%

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

2 positive1 mixed3 general

INA Forecast — Price Target — Prediction for 2027

TradingView, 19 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Insolation Energy Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 31 Aug

Insolation Energy wins ₹558.29 Cr order from NTPC Renewable Energy

scanx.trade, 04 Oct

Insolation Energy's (NSE:INA) Profits Appear To Have Quality Issues

Simply Wall Street, 02 Jun

Insolation Energy shares climb 15% after subsidiary bags ₹558-cr order

Business Standard, 09 JulOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

Insolation Energy Q1 Revenue Rises To ₹740 Crore, Net Profit Falls To ₹37 Crore

Sahi, 12 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongGrowth · Profitability · Valuation

MiddlingBusiness Quality · Financial Health

WeakRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 3 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive · see Key things to watch ↑